In Customer Service Push, Microsoft Invests In 24/7, Which Acquires Voxify

People who are forced to engage in online chats with virtual customer service agents–or who are passed from agent to agent without getting their problems solved–are likely to get highly frustrated and take their business elsewhere.

Microsoft is trying to fix that. It has struck a broad-ranging partnership with a Silicon Valley company called 24/7 (formerly 24/7 Customer) that uses large-scale data analytics to try to predict what customers want in order to serve them better.

Not only has Microsoft invested an undisclosed amount of money in 24/7, but it will also merge some of the assets it acquired nearly four years ago with the voice service provider Tellme Networks into 24/7’s technology and give 24/7 coverage under Microsoft’s portfolio of speech patents.

24/7 will in turn integrate its technology with Windows phone, the Microsoft search engine Bing and Microsoft Dynamics, which is Microsoft’s customer relationship management software, although Apple and Android and other devices will work with 24/7 too.

In addition, 24/7 has acquired Voxify, a Microsoft partner that raised $44.5 million to create automated call center agents from investors including El Dorado Ventures, Intel Capital, Palomar Ventures and Sigma Partners, according to VentureWire records. (24/7 board member George Shaheen was also a director at Voxify).

The result of all this technology should be a cloud-based software platform that will let customers contact a company over their mobile devices, the Web, the TV or the telephone and use intuitive, conversational interfaces that support speech, touch and gestures, with the software anticipating what might happen next.

“People expect to be able to talk to their computers naturally, and they want the computer to anticipate how they get things done, and when you think about the explosion of data available, there’s enough learning out there to make better sense of the data,” said Zig Serafin, general manager of Microsoft’s Online Services Division.

24/7 is based in Campbell, Calif., and has about 9,000 employees. The company was launched in 2000 and has raised over $20 million from Sequoia Capital and other investors, according to co-founder and Chief Executive PV Kannan, although it’s been profitable for several years. Details of the Microsoft partnership are not disclosed, but as a result of it, Kannan expects revenue this year of $250 million, compared to $190 million last year.

24/7 board member and Sequoia General Partner Mike Moritz said the company has operated quietly because “no one there or here needs to see their name in lights.” He also said that Microsoft has “a massive incentive to make sure that 24/7 does nothing but shine and flourish” because of the number of large customers that the two companies share.

“It’s been gradual and an exercise in dogged and persistent tenacity, but PV and his management team have now assembled a company whose combination of software and service is difficult to emulate,” Moritz said.

Kannan said he started 24/7 partly because he thought customer service was broken and partly because he saw a way to combine human agents with data analytics so that humans and machines could constantly learn from each other.

The company has 40 customers–including some of the largest banks, telcos, airlines and retailers in the world—and gets paid when its customers’ interactions with their customers are successfully completed.

All the while, though, 24/7 is collecting data on how its customers and their customers interact—the new platform will be designed to manage more than 2.5 billion speech and online interactions each year.

“No consumer wakes up and says, ‘I’ll have so much fun talking to my bank or cable company today.’ They have no interest in talking to you, but if you invest in understanding what they like, they will talk less and less as time goes on,” Kannan said.

Microsoft and 24/7 expect to release fraud alert apps for major credit card companies in a couple of months. They’re also working on a project with United Airlines that would allow customers whose flights are delayed to change their airline tickets, hotel and car reservations and get their boarding passes over their smart phones in a single transaction, without talking to an agent, “although that’s not how companies operate today,” Kannan said.

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